Saturday 25 September 2010 07.59 EDT
First published on Saturday 25 September 2010 07.59 EDT

As a long-time supporter of land value taxation (LVT), it's encouraging finally to see such positive coverage of this neglected idea in the mainstream press. For many years, those advocates of LVT brave enough to put their heads above the parapet were routinely subject to derision. Mention the American economist who did so much to popularise the idea in the 19th century and the usual response was, "Henry George, he was mad wasn't he?"

Not so mad, it now seems. As well as several recent Guardian articles, the Times, the FT and the Spectator have all recently carried pieces supportive of LVT. Politicians have begun to take note too. While Vince Cable and Chris Huhne have chosen to hide their LVT credentials since joining the government, Andy Burnham has made it a key plank of his vision for future Labour party policy.

Burnham's claim that LVT is a "true Labour" policy may rankle with some, but it was a Labour chancellor, Philip Snowden, who made the last abortive attempt to get onto the statute books in his 1931 budget. And from a social justice point of view, Labour would seem to offer LVT a natural home.

Next week, Labour will finally get down to the business of opposing a government whose approval rating is already flagging, even before its key policies have begun to bite. But it will have a choice to make: either to mount a conventional opposition to coalition policies, or to adopt a more radical approach.

The first would involve circular arguments about the timing and extent of the deficit reduction programme. The second would echo much of the press coverage in the immediate aftermath of the financial crisis, and acknowledge the need to address the underlying causes of boom and bust, the housing shortage and the inability of the state to reconcile demands for public spending with the need to raise revenue in a sustainable way.

If the Labour party is to have any purpose going forward, it needs to present itself as the distinctive and unique party of social justice. To succeed in this aim, it must be prepared to explain why current economic arrangements cannot deliver the degree of social justice that most voters expect, and offer an alternative that can.

This is where LVT comes in, but not just as another tax and not as a quick way of plugging the deficit or raising revenue to fund a growing welfare bill. LVT should form the centrepiece of a strategy for transforming the economy so that more people have access to genuine economic opportunities.

Such transformation cannot happen within the lifetime of a single parliament. It may take a generation to implement fully. But the case for transformative change could be made between now and the next election. An opposition coalition between a revived Labour party and disaffected Lib Dems could face down the Tories by refusing to play by the old rules. Tell them the truth: "The system you defend is immoral and unjust. We will put in place an economy that serves the interests of all citizens, not just a wealthy minority."

I won't repeat the arguments for LVT here, but I will offer five points of guidance to the new leader of a progressive opposition setting out on this bold new course:

1. LVT should be sold as a tax on unearned wealth. The gains made by landowners, are, as Martin Wolf put it recently "the reward of owning a location that the efforts of others have made valuable".

2. By extension, LVT should be part of a package that targets other forms of unearned income, notably the super-profits enjoyed by the shareholders and senior executives of banks as a result of their being allowed to issue money; and the returns accruing to the already wealthy through speculative investments that otherwise serve to destabilise the real economy.

3. LVT should be adopted as an alternative, not an additional, means of raising public revenue. As incremental changes to the tax system are implemented, nobody in the bottom 80% of wealth holders should be taxed any more heavily than under current arrangements.

4. Measures must be put in place to prevent the financial markets scuppering the project before it is underway. This will require international co-operation in advance of implementation and possibly emergency legislation. With a strong democratic mandate that should not be a problem.

5. Finally, be aware that in shifting taxes away from work and enterprise and onto unearned income, you will be striking at the very foundations of elite wealth and privilege. This is not something to be afraid of. Indeed, in a democracy, it should be a very strong selling point.